Discover the latest update on the U.S. mortgage market as rates drop to their lowest point in months. Find out how this could impact your finances and housing prospects.
By Makailah Gause
New York (Multibagger) - The average rate on the popular U.S. 30-year mortgage rate fell to 6.73% this week, its lowest level since February as the bond market reacted to signs of cooling inflation.
The 30-year fixed-rate mortgage was 5 basis points lower than a week earlier when it averaged 6.78%, mortgage finance giant Freddie Mac said on Thursday. It averaged 6.90% during the same period a year ago.
"Apprehension in consumer confidence may prevent an immediate uptick as affordability challenges remain top of mind," Chief Economist Sam Khater said in a statement.
But, he said, data showing a moderation in home price growth and increasing housing inventory are positive signs for prospective home buyers.
House prices increased 5.7% year-on-year in May, the smallest annual increase in 10 months as still-high mortgage rates then kept a lid on demand, the Federal Housing Finance Agency said Tuesday.
More recently, though, pending home sales surged 4.8% in June from a month earlier, helped by the recent increase in homes for sale, the National Association of Realtors said on Wednesday.
Still, even with home loan rates now more than 1 percentage point below their peak levels from last year, mortgage application volumes remain subdued.
"Many borrowers may be hoping and waiting for mortgage rates to decline even further, which is what we expect to happen once the Federal Reserve begins to cut short-term rates," Mortgage Bankers Association Chief Executive Bob Broeksmit said in a statement.
If inflation continues to cool, the Fed could cut interest rates as soon as September, Chair Jerome Powell said Wednesday.
Analysis:
The U.S. 30-year mortgage rate has dropped to 6.73%, its lowest level since February. This presents a favorable opportunity for prospective homebuyers as affordability challenges may ease. With signs of cooling inflation and potential rate cuts by the Federal Reserve, mortgage rates could continue to decline. This development could stimulate housing demand and benefit those looking to enter the real estate market.